The German “Grundbuchordnung”: History, Principles and Future

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Wilsch, The German “Grundbuchordnung”: History, Principles and Future …
The German “Grundbuchordnung”: History, Principles
and Future about Land Registry in Germany
Harald Wilsch
Summary
From an international perspective, the German land register
is one of the most meaningful registers, as it has extensive
disclosure effects, as provided by Article 873, 891, 892, Ger‑
man Civil Code. The principles enshrined in property law also
influence the formal Land Registry Procedure (numerus clau‑
sus of real rights; compulsion of types in regard to content;
principle of public disclosure; principle of clarity and definite‑
ness). The legal basis of the recording process is the German
Land Register Code (in German terms: Grundbuchordnung, or
GBO) of 1897, which can rightly be regarded as a legislative
masterpiece. The distinction between the principle of formal
consensus, Article 19, German Land Register Code, and the
principle of substantive consensus, Article 20, German Land
Register Code, has proved to be especially significant. Innova‑
tions in Land register Law are provided by the new law about
the area of jurisdictio voluntaria (in German terms: FamFG)
and the introduction of E‑conveyancing in the German Land
Registry Procedure (in German terms: ERVGBG). The prospect
of a land register database is already on the horizon (in Ger‑
man terms: DaBaGG).
Zusammenfassung
Im internationalen Vergleich ist das deutsche Grundbuch zu
den besonders aussagekräftigen Registern zu zählen, weil es
mit weitreichenden Publizitätswirkungen ausgestattet ist,
§§ 873, 891, 892 BGB. Dabei wirken sich die im Liegenschaftsrecht verankerten Prinzipien auch auf das formelle Verfahren
aus (numerus clausus der Sachenrechte; inhaltlicher Typenzwang; Eintragungsgrundsatz; Bestimmtheitsgrundsatz).
Rechtsgrundlage des Eintragungsverfahrens ist die Grundbuchordnung (GBO) aus dem Jahr 1897, die zu Recht als gesetzgeberisches Meisterwerk bezeichnet werden kann. Als besonders bedeutsam erweist sich die Unterscheidung zwischen
dem formellen Konsensprinzip (§ 19 GBO) und dem materiellen
Konsensprinzip (§ 20 GBO). Grundbuchrechtliche Neuerungen
ergeben sich aus dem Rahmengesetz zu den Angelegenheiten
der freiwilligen Gerichtsbarkeit (FamFG) und aus der Einführung des elektronischen Rechtsverkehrs im Grundbuchverfahren (ERVGBG). Bereits jetzt zeichnet sich am Horizont das
Datenbankgrundbuch ab (DaBaGG).
Keywords: German Land Register Code, Land Register, Land
Registry Procedure, Property Law
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1 History of Land Registration
The start of any historical investigation is always the question of origins, in this case, the origins of the land register
(on this subject, see Wilsch, Die Grundbuchordnung für
Anfänger Chapter A, A Brief History of the Land Register).
The literature on the German land register lacks any explanation of this and provides only a phenomenology of
precursors and original forms. One answer can be gleaned
from Die Vermessung der Welt [Measuring the World],
a popular book by Daniel Kehlmann from 2005, in which
Gauß is described as a cartographer and von Humboldt is
described as a scientific world citizen. The two characters,
Gauß and von Humboldt, could not be more different. But
what both figures have in common is their endeavour to
measure the world and thus also to archive it. Two hundred years later, Michel Foucault referred to archives as
a “general system for the formation and transformation
of statements” (Foucault, The Archaeology of Knowledge),
a system that first emerged in the history of humankind
in form of a simple list. Umberto Eco rightly sees this as
an origin of culture, as compiling a list is an attempt to
“make infinity comprehensible” and to create order. With
appearance of the list, the concept of archiving is born. It
represents a significant step forward, as summarised by
Hernando de Soto in 2001: “It is fundamental to draw a
distinction between a house and the title of ownership of
a house. The house is in a physical, tangible world, but
title of ownership is in a conceptual world.”
This concept first appeared as early as 2300 BC in the
form of Mesopotamian clay maps. These were created
within the context of land sales and note their cartographic and legal features. This concept was continued
in Attican pledge books and chronological document
collections in the Roman province of Egypt. The earliest known precursors of contemporary land registers in
Germany date back to 500 AD: they are the first records
defining rights for revenues from particular properties,
borders between properties and naming those who are
entitled to use properties.
From 900 AD onwards, there was an increasing trend
towards creation of a comprehensive property registration system, instigated by lively trade in urban properties.
From 1200 AD onwards, in the late medieval period, the
land register underwent a defining change, which should
be understood in the context of the rise of the medieval cities. In the late medieval period, the city was a
legal stronghold, a legal entity, a “city of law” each with
its own city law in written form. For instance, in 1347
Munich city law stipulated that the transfer of property
Wilsch, The German “Grundbuchordnung”: History, Principles and Future …
owner­ship had to be registered in the court records in
order to become valid. Hence, for the first time, registration in the property register was constitutive of a right,
and thus decisive in its creation. This was a significant
step forward for the concept, which had originally been
intended only for archiving purposes. The legal concept
was extended from a register of proof to a register of
rights. The right to a property was not merely indicated!
It was only realized with recording it in the register!
This means a significant change! From 1500 onwards, use
of the land register visibly declined, which is attributable
to the adoption of Roman law. Roman law did not prescribe any particular formalities regarding the purchasing
of property, and registration was no longer regarded as
significant.
The land register did not enjoy a renaissance until the
late 18th century or the early 19th century, in the modified
form of the mortgage register, in which only properties
encumbered with mortgages were registered. On the other
hand, changes of ownership were not registered – a real
paradox in economic law!
The Prussian Land Register Code of 1872, which prescribed the registration of all property rights for the
first time and provided a division into three categories,
marked the switch to a “real” land register. This land
register code provided the basis for the creation of the
Grundbuchordnung [German Land Register Code] of
24.3.1897, which should be seen as a completion to the
Bürgerliches Gesetzbuch (BGB) [German Civil Code]. Both
the German Civil Code (BGB) and the German Land Register Code (GBO) came into force on 1.1.1900. Numerous state implementation laws were passed alongside the
Land Register Code, as the individual German states insisted on maintaining their independence. For instance,
in February 1905 Prince Luitpold of Bavaria enacted a
Royal Ordinance concerning the management of the land
register in state regions to the right of the Rhine. The GBO
amendment of 1935 not only abolished all state implementation laws, but also introduced a uniform template
based on the Prussian model, which is still the model for
the land register in its current form. There were no associated ideological implications, so it was possible to retain
the German Land Register Code after 1949 on the basis
of Article 123, Paragraph 1, of the German Constitution
(concerning pre-Constitution but entirely non-ideological laws). The German Land Register Code was amended
significantly after the reunification of Germany by the
Act of 20.12.1993, the Registerverfahrensbeschleunigungsgesetz [Act for Acceleration of Register Processes],
which initiated the change from a paper land register to
an electronic land register. Nevertheless, the significant
principles of land register law have remained unchanged,
so basically this can be seen as a change of media. When
regarding the latest developments, the amendment of
2009 must be mentioned, which will be described nearer
in this article.
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2Organization
2.1 Jurisdiction over the Subject and Local Authority,
Article 1, GBO
When having a closer look at the general conditions for
an efficient legality check it is necessary to focus on the
jurisdiction over the subject and the local authority. In
contrast to some other European countries where the
Land Registry is an administrative body and the land registers are kept by the different municipalities, in Germany
(pursuant to Article 1, Clause 1, German Land Register
Code) the land registers are within the responsibility of
the local courts. The local courts are responsible for the
real estate within their area. This authority has developed already during the Middle Ages, especially from the
11th century it became common practice in large regions
of Germany that the courts were called upon in matters
of conveyance of real estate property. The reason for this
was that the execution and control of the courts offered
the advantage that in case of any objections against the
sale or the claiming of own titles the courts could be
appealed to directly. This gave the decision a higher degree of legal certainty. For example, in Munich, capital
of Bavaria, the ancient town charter of 1347 provided for
the involvement of the court. It is a great advantage that
a neutral, independent government body is appointed to
administrate the land register. Consequently in Germany
the land register is administrated by legal experts who
can only be overruled by a higher court. According to an
amendment of law, this is the Supreme Court of the Land
(in case of Bavaria, for example: the Oberlandesgericht in
Munich, in Nuremberg or in Bamberg). In addition this
guarantees that the German land register is reliable and
stable.
2.2 Procedural Competence of the Rechtspfleger,
Article 3, Number 1, Letter h, RpflG and
Article 9, RpflG
Furthermore, the fact that the Rechtspfleger is competent
procedurally guarantees that this procedure is in accordance with the rule of law. In accordance to Article 3,
Number 1, Letter h, of the German “Rechtspflegergesetz”,
the Rechtspfleger is assigned to handle all the tasks involved in keeping the land register. Same as a judge, the
Rechtspfleger is objectively independent and only bound
to law and order. This is set for expressively in Article 9
of the German Rechtspfleger law. Therefore the Rechtspfleger is objectively independent and works completely
on his own which guarantees that the deeds are processed
free of any inappropriate influences. Neither ministries,
nor authorities, parliaments, nor governments, are authorized to issue directives to the Rechtspfleger. She or he is
governed by the law only and processes all applications
totally independent from the object. It should be pointed
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out in particular that the Rechtspfleger responsibilities
are of legal nature. In fact, keeping the land register is
not an administrative task. Entries in the land register
are legal acts and jurisdiction in a broader sense. Presently 49 Rechtspfleger in Munich process 110,000 deeds
per year. At this moment there is a stock of 1,1 million
land registers for the city and the administrative district
of Munich.
3 General Principles of German Real Law
3.1 The Absoluteness of Real Rights
First of all we had to mention the absoluteness of real
rights as being a prime general principle of German Real
Law. In German law the real rights are called absolute
rights because they apply to everybody, have to be followed by everybody, and are protected against everybody. For this reason the key indicator of real rights is the
absolute power they convey to the owner of the real right.
This way, the real rights are the exact opposite of the
relative rights as they appear in the law of obligations,
for example. While relationships of the law of obligations
convey “weak” positions only which are mostly directed
at compensation for damage, real law affords a stronger,
an absolute legal position. As an example, this becomes
apparent in enforcement or in case of insolvency.
3.2 The Numerus Clausus of Real Rights
The second general principle of German Real Law is the
so called “numerus clausus” of real rights. The numerus
clausus principle states that nature and content of the
German real rights are regulated by law. Consequently
German law includes chartered real rights only. While
the law of obligations provides a generous freedom of
contract, German Real Law does not. Therefore, in legal
dealings rights have to be selected from a self-contained
pool of real rights. This might appear as being restrictive or seem like Government paternalism, or as another
expression of the proverbial German Angst. However, it
is a fact that German 19th century lawmakers were ruled
by a desire for legal certainty, clarity, and uniformity. As
a consequence the privilege of the parties involved in
creating real rights which were of discretional content
and totally imaginary had to stay behind this superior
approach. At this point the legislator considered the difficulties the Land Registry procedure entails. The legislator has implemented a completely adequate pool of real
rights in German Real Law. It includes servitudes, usufructs, land charges, right of pre-emption, priority cautions, hereditable building rights, property in a freehold
flat, and last but not least accessory mortgages and nonaccessory land charges, so called Grundschulden. Only
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these rights are allowed to be recorded; a hiring contract,
for example, or a marriage contract may not.
3.3 The Compulsion of Types in Regard to Content
Linked to the numerus clausus approach is the third general principle, i. e. the compulsion of types in regard to
content. This fixation to types in German Real Law means
that the real rights to be entered in the land register may
have the legally permitted content only. Therefore, there is
a limited freedom of designing the entry. Anything which
exceeds the statutory framework can only be content of
the real right which pertains to the law of obligations. The
fact that the essential content of the real rights cannot
be changed is due to this principle. However, additionally the legislator has considered the need for individual
design by presenting a wide range of offers. A multitude
of options is included in the individual real rights with
many alternatives offered. For example: the servitudes.
There are three different options: servitude as real right
for utilization of real estate; servitudes as real right prohibiting certain actions in regard to the encumbered real
estate; and finally servitude as a real right which excludes
any related rights.
3.4 The Principle of Clarity and Definiteness
The next general principle, the principle of clarity and
definiteness, could be defined as an additional principle
with regard to the real rights. This principle states clear,
that each act of disposal has to specify the concerned
object. In addition to that, the content of the real right
has to be specified clearly. This means that not only the
attribution in terms of real property has to be clear but
also the extent and content of the real right. Without any
doubt, a great deal of legal certainty results from this!
After all it is the land register’s responsibility to provide
complete, clear and reliable information on the legal relationships of the real estate. The more congruence there
is in substantive law, the better for any legal deals. As a
consequence, the Land Registry may use clear and unambiguous explanations only.
3.5 The Principle of the Abstract Nature of Rights
in Rem
The next principle, the principle of the abstract nature of
rights in rem, is a German principle only which can be
traced back to the teachings of Savigny and it is criticized
frequently. The circle of Roman law experts objects to this
principle just as much as Austria or Switzerland does, although it is based on the thesis that for the transfer of real
rights the terms legal ground (obligation) and execution
(decree) have to be separated. The two procedures do not
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Wilsch, The German “Grundbuchordnung”: History, Principles and Future …
depend on each other, but exist next to each other in a totally abstract way. Compared to the underlying business
transaction, the agreement is of abstract matter. If the
underlying business transaction pursuant to the law of
obligation is missing completely or is invalid, the transaction under real law is not affected. Recent studies by
professor Krimphove (see Das europäische Sachenrecht,
page 163) investigate the economic advantages of this
principle of abstract nature. Since the law of obligation
and the contract under real law are separated, there may
be more legal certainty when the contract under the law
of obligation is invalid. In this case the integrity of the
transfer of property is not affected and the costs of information, investigation, and legal counselling can be saved.
It is because of the principle of the abstract nature that
“Investigation and counselling expenses in legal matters
to establish the actual owner” are not found (according
to Krimphove, see above, page 165). As a result we can
establish that not only a higher degree of legal certainty
is granted but also costs are saved which normally would
arise from clarifying the claims from this property.
3.6 The Principle of Legality
The principle of legality binds the Land Registry to check
on the legality of each entry in the land register. This
includes the Land Registry having to observe all relevant
standards, whether the standards of the substantive law,
or the standards of the procedural law. The Land Registry
has the duty to watch over and grant the correctness of
the land register. This includes that the Land Registry
may not be involved knowingly in falsifying the land
register by means of an incorrect entry. In particular, it
may not knowingly allow the land register to become incorrect. This principle goes back to the fundamental idea
of the German land register provisions and of Article 20,
Clause 3, of the German Constitutional law (= Grund­
gesetz).
3.7 The Principle of Public Disclosure
Discussing the principle of public disclosure closes the
circle of General principles of German Real Law. Since
the real rights apply to everybody there is a need to demonstrate this to a third party. For this reason Article 873,
Clause 1, BGB (= German Civil Code) provides that all
property transfers and creations of real rights are subject to entry in the Land Register. It is the land register’s
responsibility to disclose the legal status of real estate.
The entry completes the acquisition of a real right. Consequently the entry presents itself as a constitutive act
instead of a declaratory act. Another case in point is Article 891, German Civil Code which leads to a legal assumption. It is assumed that real right entered in the land
register exists and that the proprietor is entitled to this
real right. At the same time, it is also suspected that a
real right discharged in the land register no longer exists.
4 Land Registry Procedure
4.1 Inspection of the Land Register, Article 12, GBO
The provision in Article 12, GBO contains a fundamental
stipulation of German Land Register Law: the principle of
the formal availability for inspection of the land register.
By this we mean the framework conditions and requirements for viewing the land register, which seek to establish a balance between the conflicting interests of data
protection and transparency. According to Article 12,
GBO, not everyone is permitted to view the land register.
Only those who demonstrate a legitimate interest have
this permission. The sense and the purpose of this provision is to prevent improper viewings which could harm
the interests of the real rights holders who are recorded.
Figuratively speaking, before the land register data and
files can be accessed, one must first pass through the legal firewall, or the security concept of Article 12, GBO
(cf. Hügel/Wilsch, GBO, 2nd edition, overview of Article 12, GBO). In order to demonstrate a legitimate interest, it is sufficient for the applicant to demonstrate an understandable interest justified by the circumstances. It is
always necessary to seek the right balance between the
need for information and the fundamental right to informational self-determination, which is why the stipulation
of Article 12, GBO is the subject of extensive casuistry
and does not even spare Federal Presidents of Germany
(as in the case of Mr. Wulff). The pursuit of unwarranted
objectives and the satisfaction of mere curiosity must be
seen to be forbidden. The scope of access is determined
by the scope of the legitimate interest. The authentication
clerk (in German terms: Urkunds­beamter der Ge­schäfts­
stelle) decides whether or not to grant access (Article 12c,
Paragraph 1, Number 1, GBO). The provision of Article 12,
GBO, which also has constitutional implications now (in
the light of the fundamental right to informational selfdetermination), is in deliberately strong contrast to other
national provisions, such as those of Austria, Great Britain and France, all of which provide unrestricted access
to the Land Register. The stipulation in Spain, however,
also provides that anyone has the right to view the land
register, if he is able to demonstrate a legitimate interest.
4.2 Application Procedure, Article 13, GBO
German land register procedure is generally formulated not as an ex officio procedure but as an application
procedure. This is laid down in Article 13, Paragraph 1,
Sentence 1, GBO, according to which an entry should be
made only in response to an application, provided that
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the law does not stipulate otherwise. It is at the discretion
of the parties concerned whether an entry in the Land
Register is made or not. However, the principle of public
disclosure described under point 3.7 provides a significant incentive to make an application. The entry has an
constitutive effect, so property right and all kinds of other
real rights came into existence by registration in the Land
Register. De facto, this makes an entry imperative. This is
one of the reasons why the German land register must be
regarded as a particularly meaningful register. Because it
is impossible to obtain the title to a property without a
land register entry, legal relations can be based entirely
on the content of the land register. Hidden charges of any
kind are alien to the German Land Register. Everybody
can trust into the Land Register (see point 5.1).
4.3 The Land Registry’s Obligation of Legality
Checks within the Scope of the Principle of
Formal Consensus, Article 19, GBO
This takes us to the implementation of the law. As the
Prussian Mortgage Act of 1783 has shown, the best principles may turn useless if they entail a long and tedious
registration procedure. For this reason the Prussian Land
Registry Law, amended in 1872, provided for the replacement of the major part of the “principle of substantive
consensus” by the “principle of formal consensus”, which
then became the matrix for the uniform German Land
Register Code of 1897. The related memorandum points
out that widely introducing the formal principle of consensus will help to accelerate and to simplify the procedure.
The principle of formal consensus is laid down in
Article 19 of the German Land Register Code (= GBO).
It quotes: An entry will be made if the right of the party
who grants it is affected by it. Afterwards, the principle
of unilateral permission applies. In practice, this means:
If the Land Registry is supposed to make an entry the
party concerned must submit a notarized permission. This
way the principle of formal consensus turns into some
kind of rule of evidence, i. e. in such way as the existence of the agreement is deemed proven once the party
concerned grants its permission. As a consequence, the
Land Registry does not have to check whether or not the
material consensus was actually supplied. Judging from
experience: nobody will grant permission for an entry
which will have negative effects on him, unless there is
a respective consensus itself. Insofar as far as real rights
shall be registered, under German law it suffices that the
owner, being the party affected, grants his permission by
instrument of a notary’s deed. The Land Registry may
act from there. Of course, this unilateral permission has
to comply with all the general principles of German Real
Law outlined above. In particular, it is not correct that
within the scope of the principle of formal consensus the
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rect is: Although the Land Registry does not check on the
material consensus it does definitely on the substantive
content of the right to be entered. After all the legality
principle outlined above enjoys top priority. The following checklist (according to Meikel/Böttcher, Land Register
Code, 8. edition, volume I, preface, note H 85) pursuant to
Article 19, Land Register Code demonstrates this:
  1)Application, Article 13, Land Register Code?
  2)Permission, Article 19, Land Register Code?
  3)Authority for giving such a permission?
a)the authority itself?
b)no restraint of power?
  4)Authority in case of power of attorney ok?
  5)Content of the permission, Article 19, Land Register
Code:
a)numerus clausus principle?
b)compulsion-of-types-principle?
c)in case of a common real right: Article 47, Land
Register Code ok?
  6)Requirement of further permissions from third parties?
  7)Description in accordance with Article 28, Land
Register Code?
  8)Tracto sucesivo, Article 39, Land Register Code?
  9)Formalities/notarial certification, Article 29, Land
Register Code?
10)Requirements of approvals?
The question arises where the principle of formal consensus pursuant to Article 19, Land Register Code, has to
be applied. For example, this procedure will be followed
with an entry of real rights if a usufruct, a servitude, a
land charge, or a mortgage or a Grundschuld has to be
registered. Thus this simplified procedure will be applied
every time unless the Act provides for something else.
The most important exception derives of Article 20, Land
Register Code, which states the principle of substantive
consensus.
4.4 The Land Registry’s Obligation to Check within
the Scope of the Principle of Substantive
Consensus, Article 20, GBO
The provision of Article 20, GBO does not comply with
the principle of formal consensus described above. Article 20, Land Register Code, states: “In case of conveyance of land or in case of creation, changing of transfer
of a hereditable building right an inscription into the land
register can only be made, if there is the agreement of the
relevant parties.” Consequently, within the scope of the
principle of substantive consensus the situation is such
that the submission of a unilateral permission is insufficient. Sufficient proof is provided by submission of the
agreement only. In context with the registration procedure this means that the notary has to submit to the Land
Registry the deed which certifies the agreement.
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The question here is why a more severe procedure
has been implemented here. The German legislator was
guided by the following motives: There exists a specific
need of legal certainty where the ownership of the real
estate property is concerned. After all, this will have farreaching consequences for public as well as in private
law. In the German legislators’ opinion, there is a special
interest in the congruency of the land register and the
real legal status which should be complete. This takes us
to the following conclusion: With the other real rights
(usufruct, land charge, servitudes, mortgage, Grundschuld) the possibility of an incorrect land register may
just be tolerable, therefore a unilateral permission will be
sufficient. However, this can not be tolerated in regard to
ownership where the correctness of the Register is more
important than the simplification of the formal procedure. As a consequence, the German legislation not only
orders the parties concerned to check the correctness but
also conveys responsibility to the Land Registry. This is
why the checklist looks different for Article 20, German
Land Register Code:
1)Application, Article 13, Land Register Code?
2)Agreement of the relevant parties, Article 20, Land
Register Code?
a)all relevant parties have declared the agreement?
b)no restraint of power?
c)all powers of attorney ok?
d)content of the agreement: two corresponding de­
clarations?
e)no condition, no time limit?
f)numerus-clausus-principle and compulsion-oftypes-principle?
g)in case of common ownership: Article 47, Land
Register Code ok?
3)Description in accordance with Article 28, Land
­Register Code?
4)Tracto sucesivo, Article 39, Land Register Code?
5)Formalities/notarial certification, Article 29, Land
Register Code?
6)Certification concerning the real estate acquisition
taxes, Article 22, Real Estate Transfer Tax Law?
7)Certification concerning the pre-emption right of the
community, Article 28, Planning Code?
But what happens if the Land Registry detects an incorrect application while checking its legality? What has to
be done, which procedural instruments are available to
the Land Registry?
4.5 Procedural Instruments in the Event of
Obstruction of Registration, Article 18, GBO
Article 18, Land Register Code outlines clearly, that if an
entry applied for is obstructed, the Land Registry shall
either refuse the entry, stating the respective reasons, or
it shall grant a reasonable period of time for repair to the
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applicant. Even though at first glance it may look as if the
Land Registry has a free choice of the two instruments,
this is not the case. Meanwhile, a complex casuistry has
developed with Article 18, Land Register Code. Generally
speaking, usually the interim provision applies, with refusal rather being the exception. Mostly this is due to the
different implications of interim provision and refusal.
While in case of an interim provision the effects of the
applications remain valid in regard to the ranking (tempus principle), in the case of a refusal the effects are lost.
To put in a different way: In the case of an interim provision, the application is still pending, in case of a refusal
it is terminated. Cases for an immediate refusal:
p The applicant is not entitled at all to apply
pan incorrect application which was refused before is
submitted again
pthe obstacles were not remedied within a reasonable
period of time
p the right cannot be entered (numerus clausus principle)
p the right has no content which could be entered (compulsion of types principle).
In all other cases there are mistakes in the application
which can be repaired within a reasonable period of time.
In a case like this the Land Registry issues an interim
provision.
With the issuance of this interim provision it is required that all obstacles are stated. At the same time,
an explanation is required of how the obstacles will be
repaired. Also, a date of completion must be determined,
the latter being the reason why the interim provision requires formal delivery.
In case of a counterstatement the interim provision
may be nullified at any time. The legal instrument of
complaint is permitted to counteract the interim provision, Article 71, Land Register Code. This means that an
objection against the Rechtspfleger’s decision at the district court is permitted. Thus the legal instrument is not
dealt with on the same level of jurisdiction but on the next
higher level (= amendment to the Act dated 6‑8‑1998, see
Demharter, GBO, 28. edition, Article 71, note 5). This is
Supreme Court, for example the Supreme Courts in Munich, Nuremberg and Bamberg.
After introducing the instruments of the Land Registry
in case of incorrect applications the line of action when
detecting incorrect entries has to be examined.
4.6 Procedural Instruments in the Event of Incorrect
Entries, Article 53, GBO
Article 53, Land Register Code, provides two procedures.
If the entry is inadmissible by content (see principle of
compulsion of types), the entry has to be deleted ex officio, Article 53, Clause 1, Sentence 2, Land Register Code.
This is the case every time the Land Registry has entered
a right which is not possible to be registered (see ­numerus
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clausus principle). The same applies when a real right
with inadmissible content was entered (see compulsion
of types). Experience shows that this occurs very rarely.
In contrary, if an entry was made which violates legal
provisions in regard to registration but is admissible in
regard to content, an objection ex officio against the legal
compliance of the land register has to be made, Article 53,
Clause 1, Sentence 1, Land Register Act. Such an incorrect
registration may be the case if, for example, a right was
entered, or deleted, by incorrect procedure. Because of the
legal effects of registration which we will discuss later on
there is a risk that the person who is truly entitled loses his
right, and bona fides acquisition applies (for more details
see part 5.3). This would result in a claim for damages
against the Land Registry. In order to prevent such a bona
fides acquisition the Land Registry has to enter an objection ex officio. On the other hand, rectification by the Land
Register is not permitted officially since such an act would
intrude upon the legal position of the entitled person.
5 Legal Effects of Registration
5.1 The Constitutive Effect, Article 873, BGB
This takes us to a primary effect of registration. Substantive law provides that every transfer of real estate property pursuant to the law of obligation, or each transfer,
changing or discharging a real right, requires two things:
First of all the agreement, secondly the registration. This
is provided for in Article 873, German Civil Code (BGB).
Both requirements must be complied with for the desired legal effects to be valid. Therefore registration has
a constitutive effect. This applies also to the creation, the
transfer, or the discharge of real rights.
5.2 The Fictive Assumption, Article 891, BGB
(positive + negative)
In addition to this, Article 891, German Civil Code, establishes two effects. The first one is the positive assumption.
If a real right is entered in the Land Register pertaining to
a certain person it is assumed that this person is entitled
to this right, Article 891, Clause 1, German Civil Code.
The other is the negative assumption. If a real right entered in the Land Register is discharged it is assumed that
this real right does no longer exist, Article 891, Clause 2,
German Civil Code. In this context it should be pointed
out that these assumptions not only are valid in regard to
legal dealings but also to the Land Registry itself. However, these assumptions can be proven wrong, too, i. e.
this is particularly easy in the case of a mortgage. A case
in point: It is proven by notarized receipt that a claim is
settled. In such there is evidence that the registered person is no longer entitled to the mortgage.
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5.3 The Good Faith Function/Bona Fides Effect,
Article 892, BGB
However, the Land Register develops not only the fictive assumption outlined above but also the effects of
bona fides, effects of good faith. Here, the faith in the
correctness of the entry is protected. The faith in power
of disposal is equally protected. This is why Article 892,
German Civil Code, provides for the acquisition in good
faith of a party which is not entitled but of which the
entry in the land registry says it is. The land register is
considered as being correct and true and is in favour of
the party acquiring in good faith. The correctness of the
land register is assumed in order to protect legal dealings.
German law does not differentiate any further whether or
not the acquisition was against remuneration.
Therefore one can trust that the Land Registry has
duly fulfilled his task. This is why one can trust the land
register, and this is immensely essential to the legal certainty. Because of this it is dispensable to check the title
of the person entered in the land registry it is simply not
necessary. To put it in another way: the legal document
substitutes the right. By this, the legislator has made his
decision. The German legislator is of the opinion that the
protection of legal dealings is more important than the
interests of the true beneficiary. He achieves a high degree of security by means of the law deploying a fiction.
In consequence, the so-called root of title, i. e. a chain
of deeds on the real estate property as it is provided by
British law, is not required here. You can trust in the land
register! This leads to the last topic, the liability.
6Liability
6.1 The Objection of Office Pursuant to Article 53,
GBO, in Regard to Preventing Acquisition in
Good Faith
By entering the above mentioned objection any acquisition in good faith can be prevented. It is exactly the
purpose of this objection to destroy the good faith in the
correctness of the land register. The objection protests
against the correctness of the legal status as entered. Furthermore, it is the task of the objection to avoid regress
against the Government. This way any claims of damages
against the state can be avoided.
6.2 Consequences of the Acquisition of a Real Right
in Good Faith, Article 892, BGB
This refers to the claims of damages which may follow,
any acquisition in good faith because the purchaser without notice acquires the real right indestructible and to the
detriment of the entitled person. By such acquisition in
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good faith the person who is really the owner loses his
real property right. However, another consequence is that
by acquisition in good faith the land register becomes
correct again. In particular, this fiction is transferred into
reality. Legal Fiction becomes legal reality! Thus the legal
protection granted by the German land register extends
further than the legal protection granted by British law.
Under German law the purchaser in good faith does not
have to fear the withdrawal or limitation of his real right.
Also, he does not have to worry about any rectification
which is often the case in England against some payment of damages. Thus his real right is untouchable and
indestructible.
6.3 Claim of Damages Against the Land Register,
Article 839, BGB in Conjunction with Article 34,
German Federal Constitution
The government liability becomes reality, based on the
provision of Article 34 of the German Federal Constitution (= Grund­gesetz). This means that in principle the
government is liable for its officers which turns out to
be an advantage from a certain point of view. For legal
dealings it is better to primarily claim from the government and not from an individual officer. At the same time
the officer’s liability towards the third party is omitted
automatically. Liability is transferred to the government
which is liable instead of (and not together with) the officer. In case of violation of duty by government officers
the German Federal Constitution attributes liability to
the government. However, this applies only if the officer
did not act intentionally or grossly negligent. The respective limitation is not only provided in the mentioned
Article 34, German Federal Constitution, but also in Article 839, Civil Code. Therefore, if the officer violates his
duty of office intentionally or grossly negligently he will
have to come up for the damage suffered by the third
party, Article 839, German Civil Code. However, in all
cases restitution in kind is excluded. This means that the
injured party neither gets the property nor its real right.
The injured party will be compensated in cash.
7 New Developments
7.1Preface
On September 1, 2009, a comprehensive reform in the
area of jurisdictio voluntaria became effective in Germany. This means the so-called Gesetz zur Reform des
Verfahrens in Familiensachen und in den Angelegenheiten der freiwilligen Gerichtsbarkeit, shortened to the designation “FamFG”. This law took the place of the old Act
on Voluntary Jurisdiction (FGG) and brings with it not
only changes in the area of the family court, probate
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court, Commercial Registry procedures, but also changes
in the area of the Land Registry Procedure.
7.2 Relationship of Framework Law (FamFG) and
Special Law (GBO)
According to Article 1, FamFG the new law applies to the
procedure in family matters as well as in matters of jurisdictio voluntaria, insofar they are assigned to the courts
through federal law. Since Article 23a, Paragraph 2,
Number 8 of the Juridicature Act (GVG) also assigns land
register matters to matters of jurisdictio voluntaria, this
also signifies the basic applicability of the new FamFG
in Land Registry Procedures. However, the application of
this is not unlimited, but only under the condition that
the German Land Registry Code contains no deviating
regulations. Therefore, the following relationship exists:
the new FamFG is the general framework law; the GBO is
in contrast the special law.
7.3 Some Examples
This is also the reason why the general appeal provisions (Article 58 ff., FamFG) do not apply, the more so as
the German Land Register Code already provides more
specific regulations (see Article 71, GBO). The same also
applies to the suspension of the procedure, which is basically possible in the area of jurisdictio voluntaria, but
not in the specific Land Registry procedure, because in
the Land Registry procedure this would lead to significant ranking problems and significant processing delays.
It is the same with the inspection of files, which is now
regulated in Article 13, FamFG. However, the GBO also
provides a specific regulation here, namely Article 12,
GBO. In contrast, it is different with the disclosure of
documents, which is now regulated in Article 15, FamFG
and which also applies to the Land Registry Procedure.
The interim provision of the Land Registry can therefore
either be delivered formally or simply by post. However,
it is the practice of the Land Registries to deliver formally
in order to guarantee a secure procedure.
7.4 Content of the Decision and Instruction on the
Right to Appeal, Article 38, 39, FamFG
There are other important new regulations contained
in Article 38, 39, FamFG. According to Article 38, 39,
FamFG, the decision (interim provision or refusal) must
contain a formula and a justification. From now on, every decision must contain an instruction on the right to
appeal. Therefore, the court where the right to appeal can
be filed, is also to be indicated now. These are the Land
Registry and the Supreme Court in the Land Registry procedure. In addition, the location of the competent court,
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the form of the right to appeal and the term must also be
indicated. Herein, the German legislator sees an expression of legal assistance.
7.5 Change in the Stages of Appeal
The change in the stages of appeal is also very important.
Since September 1, 2009, the regulation in Article 72 of
the German Land Register Code provides that the Supreme Court must decide on the appeal. Insofar as the
area of the Free State of Bavaria is concerned, these are
the Bavarian Supreme Courts in Munich, Nuremberg and
Bamberg. The appeal against the decision of the registrar
has to be filed at the respective Supreme Court, which
means a significant strengthening of the role of the registrar. The regional court (Land­gericht) no longer stands
over the registrar; it is now the Supreme Court (Ober­
landes­gericht).
7.6 Introduction of E‑conveyancing in the German
Land Registry Procedure: an Overview
7.6.1 E‑conveyancing and Electronic File (= electronic
Grundakte), Article 135, GBO
On October 1, 2009, the law for introduction of e‑conveyancing in the Land Registry Procedure became effective
(ERVGBG). According to Article 135, Paragraph 1 of the
Land Register Code (GBO), applications can be conveyed
as electronic documents, in accordance with the following provisions. The individual state governments are authorised to meet the particular provisions through regulation, Article 135, Paragraph 1, Clause 2, GBO. This is not
only due to the federal character of the Federal Republic
of Germany, but also due to the different financial points
of departure of the federal states.
Therefore it is necessary to design the electronic infrastructure first. Within the scope of such a regulation
definite and directly addressable Land Registry facilities,
which are responsible for the receipt of the documents,
Article 135, Paragraph 1, Clause 2, Number 3, GBO, can
also be named. In the following, the notaries must send
certain data in structured form, in XML format, Article 135, Paragraph 1, Clause 2, Number 4b, GBO. The XML
data record is the basis for the generation of a registration
proposal, which the Land Registry must check comprehensively and independently (cf. also www.xjustiz.de).
According to Article 135, Paragraph 2, GBO, it is now
also possible to carry on the files in electronic form (in
German terms: elektronische Grundakte). Once again, the
individual countries can set the point of time from which
the files must be carried on electronically.
We now know which German Länder will be the first
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Württemberg, North Rhine-Westphalia and Saxony. In
North Rhine-Westphalia the test phase is scheduled to
begin within 2012 (according to the German Federal
Chamber of Notaries in the publication BNotK-Intern
4/2011). However, the test phase has already been set up
in Saxony, in the land registries of the Local Courts of
Dresden and Aue, and in Baden-Württemberg it is scheduled to start on 1st July 2012. In Baden-Württemberg it
will go hand in hand with far-reaching land registry reforms, afterwards there will only be 13 land registries
left. Regarding this development, other German Länder,
including Bavaria, are waiting to collect further experiences. To document this development properly as well as
the changeover of individual local courts, the German
Federal Chamber of Notaries is going to compile an index
and make it available online.
7.6.2 Receipt of Electronic Documents, Article 136, GBO
According to Article 136, Paragraph 1, GBO, an electronic
document is received by the Land Registry, as soon as the
technical facility meant for receipt has recorded it. The
opening hours of the Land Registry no longer matter; the
applications and the deeds can be conveyed at any time.
The exact point in time of the receipt has to be noted with
the aid of an electronic time stamp, Article 136, Paragraph 1, Clause 2, GBO. The receipt has to be confirmed
to the applicant immediately with the specification of
the point in time of the receipt, Article 136, Paragraph 3,
Clause 2, GBO. This confirmation has to be provided with
a corresponding electronic signature, Article 136, Paragraph 3, Clause 3, GBO.
7.6.3 Form of Electronic Documents, Article 137, GBO
The regulation according to Article 137, GBO regulates
the form of the electronic documents and their equivalence with regard to the paper documents. This means not
only the electronically certified copies of documents prepared by the notary, but also the request from other authorities, Article 137, Paragraph 1, and Paragraph 2, GBO.
7.6.4 Transfer of Documents, Article 138, GBO
The provision in Article 138, GBO regulates carrying
on the electronic files (in German terms: elektronische
Grundakte) and the conversion of incoming documents
and/or documents which are already completed. According to Article 138, Paragraph 1, GBO, the Land Registries can transfer those documents, which come in paper
form, into the form of an electronic document. The file
formats, which may be used in electronic legal relations
with the Land Registries, are defined by regulation, Article 138, Paragraph 2, GBO. If the e‑conveyancing has
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already been introduced, but the file (Grundakte) is still
in paper form, the electronic documents submitted are
to be printed out and taken to the file, Article 138, Paragraph 3, GBO. These regulations will become important
in the transfer phase.
7.6.5 Inspection of the Files and Data Recall, Article 139,
GBO
According to Article 139, Paragraph 1, GBO, inspection
of the electronic file (elektronische Grundakte) can also
take place at another Land Registry. The Land Registry
at which the inspection is requested decides about the
permission of the inspection, Article 139, Paragraph 2,
GBO. It is the ratio legis to spare citizens from the inconvenience of long distance.
7.6.6 Electronic Decisions, Article 140, GBO
If the file (Grundakte) is managed electronically, the decisions (interim provision or refusal) can also be issued
in electronic form, Article 140, Paragraph 1, GBO. These
decisions have to be provided with a qualified advanced
signature, Article 140, Paragraph 1, Clause 2, GBO.
7.6.7 Draft July 2011 about a Data Based Land Registry
The Act for the Introduction of a Land Register Database
(DaBaGG), the draft which was submitted in July 2011,
will also bring far-reaching changes to the GBO. So far,
there has only been a “draft for discussion” and no draft
as yet from the relevant official in the German Federal
Ministry of Justice. The changes are primarily technological, particularly the development of a real land register
database, rather than merely scanned land register pages.
Improved integration of the land survey register also
plays a role, whilst the structure of the land register will
remain unchanged (what is welcome). In order to achieve
the desired objective of the land register database, it will
be essential to convert a large number of scanned land
registers. The legislator plans to implement this in a revised formulation, which will be accompanied by a major
revision of purposeless or obsolete legal processes (according to § 72a of the planned new land register law). It
shall show only the current legal conditions. Land register experience suggests that a committee will be formed
to assume responsibility for converting the land registers.
The old data must not be deleted, as they serve as the
source and evidence on which the conversion is based.
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The primary purpose of the new amendment is “to
convert to a new, structured data storage system” in order to provide new tools for legal arrangements. This
means new opportunities for research, more effective use
of stored data, and “improving the function of the land
register”, particularly with regard to compiling notarial
documents or comprehensive research.
Likewise, among other things, the land registries shall
be enabled to collect data directly from the land survey
register, such as for the realisation of parts of a property.
It shall also be possible to generate an overview of all
encumbrances on a property using the land register. It is
unclear when a draft bill or even a final bill, will appear.
We can, however, rule out the possibility that the new law
will come into force during the current legislative term
(before the end of 2013).
References
Bauer, H.‑J. und von Oefele, H. (Hrsg.): Grundbuchordnung: GBO, Kommentar. 2. Auflage, Verlag Franz Vahlen, München, 2006.
Bengel, M. und Simmerding, F. (Hrsg.): Grundbuch, Grundstück, Grenze
– Handbuch zur Grundbuchordnung unter Berücksichtigung katasterrechtlicher Fragen. 5. Auflage, Luchterhand, Neuwied, 2000.
Demharter, J.: Grundbuchordnung, Kommentar. 28. Auflage, C. H. Beck,
München, 2012.
Hügel, S. (Hrsg.): Grundbuchordnung, Kommentar. 2. Auflage, C. H.
Beck, München, 2010.
Krimphove, D.: Das Europäische Sachenrecht. Verlag Josef Eul, Lohmar,
2006.
Kuntze, J., Ertl, R., Herrmann, H. und Eickmann, D.: Grundbuchrecht,
Kommentar. De Gruyter, Berlin, 2006.
Meikel, G. (Hrsg.): Grundbuchrecht, Kommentar. 9. Auflage, Luchterhand, Neuwied, 2004.
Schöner, H. und Stöber, K.: Grundbuchrecht. 14. Auflage, C. H. Beck,
München, 2008.
Wilsch, H.: Die Grundbuchordnung für Anfänger. C. H. Beck, München,
2011.
Anschrift des Autors
Diplom-Rechtspfleger (FH) Harald Wilsch
Bezirksrevisor am Grundbuchamt München
Infanteriestraße 5, 80325 München
[email protected]
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